Row Over Charge On Crb Assets Imminent

The issue of charge on the assets of CRB Capital Markets is expected to get into a dispute with the banks claiming first charge and the Reserve Bank likely to fight for the interest of small depositors.

The banks like State bank of India and Bank of Baroda have already moved Mumbai High Court and got the properties of CRB attached to recover their money. However, Reserve Bank is expected to initiate winding up proceedings under its newly granted powers to sell assets and pay depositors. Here the matter will go into dispute, say sources.

The thousands of depositors in the Rs 200 crore fixed deposit programme of CRB Capital Markets Limited (CRB) face an uphill task recouping their money. Since the deposits are unsecured in nature their claim to the assets of the company comes after the loans to the secured creditors including the banks are paid off.

M S Verma, chairman and managing director, State Bank of India, told Business Standard that SBI had first charge over the assets and hence was hopeful of recovering the outstanding amount. Bank of Baroda (BoB) had moved the Bombay High Court and the court has appointed a receiver to attach some of the lease and hire purchase equipment, book debts and equity investments of CRB to meet the Rs 2.5 crore due to Bank of Baroda.

United Western Bank (UWB) had advanced Rs 2.65 crore to CRB for funding its leasing and hire purchase activity. But UWB believes that it will be able to recover this amount. We are writing to all the lessees asking them to pay the lease rentals directly to UWB said P N Joshi, chairman, UWB.

On its part, the Reserve Bank of India is expected to ensure that the interests of the depositors are not sacrificed.